If Rogers wanted to lose subscribers they’d “like to lose the lower-value”

John Connors

June 10, 2010 11:50am

At the RBC Technology Conference in New York yesterday Rogers CEO Nadir Mohamed said that they are actually not going to compete on price with the new carriers because he doesn’t expect to lose many smartphone subscribers. “If we lose subscribers to new players, we would like to lose the lower-value (customers). We want to keep the ones that are higher value… You won’t see the Rogers brand being priced in a way that provides a disconnect between the quality and what we offer.”

This then begs the question about what “value” actually is. In these highly competitive wireless days isn’t every customer valuable? Value in this case is clearly about how much per month a subscriber contributes to the bottom line and making sure the shareholders see a profitable return on investment. I believe when Nadir Mohamed speaks about “Quality” he’s referring to the size, speed and reliability of their network.

Flanker brands such as Koodo Mobile, Solo Mobile, Virgin and Fido and the new entrants like Public Mobile, Mobilicity and WIND Mobile all have marketing strategies to go after the “value conscious” segment. The incumbent players like Rogers, Bell and TELUS have certainly adjusted their price plans accordingly to keep and grow their subscriber base. In addition, all Canadian carriers offer some type of Smartphone (not Public Mobile) and according to research more people are migrating to this type of mobile device.

With subsidized pricing usually coming in around the $49.99 – $99.99 price point on a 3-year, any device is actually affordable. Smartphone plans start these days around $10 a month for basic data. So these days even the lower-value customers could afford a Smartphone. Not the newest one on the block but one good enough to get started.

Nadir Mohamed makes a solid point because he knows with all this competition that customers might go and try something new. Even with Rogers being the largest wireless player in Canada with over 8 million subscribers… a customer leaving is never a good thing as it takes more time, money and resources to eventually bring them back.

doesn’t take a rocket scientist to figure out what he is talking about.

fine strategy. he runs a company, not a charity.

Terry

That’s a pretty bold statement to say they offer quality… Which they DON’T.

theninjasquad

Way to state the obvious.

Unfortunately for them, I would have taken my smartphone service to them but Wind is a way better deal. Where else can you get a solid Blackberry plan for less then $50?

5Gs

The reason you guys are saying that at this moment is because you guys acting opposite to what you guys know.

In just a matter of time, i know and i believe rogers will pay the price very soon..

Just a matter of time. Mark my words..

Go Wind Go!

MuRaNo

@5Gs

Wind is a joke ! With less then 30000 users….. and going down everyday to other company’s

Rami

When it comes to data plans Wind is the best out there. If Bell hadn’t given me my retentions plan I would surely be with Wind (When the CRTC didn’t give them the green light I gave up and renewed with Bell )

MER1978

The supposed reason for auctioning off wireless frequencies was to increase competition…

What we get instead is incumbent carriers essentially saying they won’t do a thing different???

Way to go Conservative government.

Jesse J

@MuRaNo

I can tell you with complete honesty that WIND is doing very well. Way more than the 30,000 you speak of.

James Lui

Its unfortunate, but Rogers will most likely retain somewhere around 90% of their so-called “high value” customers because these customers fall into essentially two groups. BlackBerry users. iPhone users. And they have a ton of both, and the current device iterations of both (and even upcoming ones) do not work on WIND’s network.

So the real culprit isn’t Rogers, its more of the handset makers not diversifying the band range or locking themselves into exclusive contracts with carriers. In other words, heavily anti-competitive practices.

WHAT IM REALLY SAYING IS: Apple and the like are jerks because while clearly being able to make AWS devices, do not because of their sleazy little deals with the larger carriers. Thats not good business in any shape or form.

Also, there are a hell of a lot more “low value” customers in the Canadian marketplace than “high value” ones. Rogers certainly knows which basket to put all of its eggs into. >_>

Nadeem

couldn’t agree with you more!

Guy Fawkes

@murano troll much? I think nadir fails to understand his demographic or is just saying this to assuage fears of shareholders. Smartphone high value users are usually educated, tech savvy urbannites. This is the market wind reaches. Once they have iphone 4, samsung galaxy S, and a couple other decent smrtphones what advantage will rogers have…. 85$ for unlimited everything in northamerica while in homezone can’t be touched by the big three at the moment. Network relibility is the only issue right now and that will disappear in time. If vancouvers launch is any indication, 30k seems a paultry estimate

schultzter

@James Lui That’s my biggest beef: you’re always stuck with the carrier the device was manufactured for! And the Bill C-32 isn’t going to help things either by making anti-circumvention (possibly including unlocking & jail-breaking & rooting) illegal!

I wish the manufacturers would give you default radio firmware and a CD or a download of what ever firmware you needed for the carrier & frequency you wanted to use.

The other problem is the carrier’s plans are priced to recover the phone subsidy. But there’s no discount if you bring your own phone – so you’re paying for your phone twice if you bring your own (or keep your phone past the end of the minimum commitment).

Guy Fawkes

@James … you might want to check the banfs cobered by the 4g (hint AWS radio inside), as well the flagship phone for wind is a BB9700.

No the main reason would be the extortionate cancellation fees on both data and voice.

Guy Fawkes

@James … you might want to check the bands covered by the 4g (hint AWS radio inside), as well the flagship phone for wind is a BB9700.

No the main reason would be the extortionate cancellation fees on both data and voice.

A A

Consumers will stay with bell/rogers/telus/fido because of subsidized phones. The low value customer is low value because they can’t hold on to their cash, simply because they spend it easily on crazy stuff so they tend to live check for check… they also want the best. No “value” aka poor customer will buy a $899 iphone to put on wind, or even a $450 9700 BB.

James Lui

@Guy Fawkes

If you didn’t realize what I meant by the quoted specs, it doesn’t support UMTS Band IV (1700MHz), which means it can’t use Wind’s HSDPA network, which means you can’t use Wind with the new iPhone.

Plazmic Flame

Well, for me and my house, we won’t be trapped in 3 year contracts ever again. Teaching my family and kids about ownership, not locking into contracts except if it’s a house or a car, everything else, cash on site, period.

David

Looking at the demographic (and at the numbers) I am of the opinion that the big three are not as entrenched as they would like to think. What Nadir Mohamed sees as ‘low value customers’ are not (as someone here said) folk who ‘connot hang on to their cash’ but are in fact young people (mostly students) who are just getting started out in life. When you consider (as well) that there are many thousands of affluent people (who are sick of the status quo) – who are biting at the leash for a chance to buy elsewhere – the big three should (IMO) be very, very, worried.

Claudiu Jernea

Until the new carriers will have an expanded network across the provinces Rogers should have nothing to worry about. Wind and Mobilicity are just too small right now.

Chris

Rogers says this nonsense so they can continue to fool the fools at the CRTC for as long as disgustingly possible.

Karam

He’s basically saying that valuable customers are those who pay the most for their plans, hence they are the valuable ones to Rogers.

I guess that also means he doesn’t care about the others, which is pretty stupid because the volume of customers is more important than that who pay the most for their service.

In other words, this guy needs a serious wake up call…. a slap on the face should do it!

Scott S

So Nadir, what you’re saying then is that as soon as WIND has built their network out and has proven it’s reliable THEN you’ll start to compete? Or are you saying that WIND will start charging the same (rip_off) prices that you’re currently charging so you won’t have to worry?

Well when (not if) WIND has built their network out and is still charging lower prices what are you going to do? You’ll not only be screwed when you have to explain to your shareholders that either profit is going down because you’re losing customers (especially those high ARPU customers that will benefit the most by switching). But it’s really going to bite you because you’ve pissed off a lot of Canadians with your (and Bell and Telus’s) oligopolistic ways and they won’t want to come back to matter how sweet the deal.

Cadet

“Smartphone plans start these days around $10 a month for basic data. ”

the starting price is $20 for bb and $25 for other smart phones

$10 is those restricted web browsing which cannot be use on unlock cell phones

it’s a lie if they say it’s around $10

$10 are NOT smartphone users and are non-smart phone users, thank you very much!

Ali

so rogers is basically saying we know that we are ripping ppl off and we will continue to do so for as long as we can until we are forced to reduce pricing and all the non data customrs can leave if they want to.. very poor statement from the ceo. he is pretty much telling customers to take a hike. i was ready to goto rogers and leave wind just because of the iphone but instead ill spend 450 and get the bb 9700 and stick with wind.

Guy Fawkes

@murano… your citing articles 2 and 3 months old. They just launched a new city.. and the data from those reports itself was delayed…

@james Sorry, Computerworld retracted and changed the article I had read, now the penta band they stated was 800mhz and the 1700mhz version is based on some info that says apple licensed qualcomm to make some 1700mhz chips for tmobile. We ll see i guess.

jarr

if you dont want to pay for a cell phone or data, then don’t. no one is forcing you. rogers runs a business. not a charity.

Spoken like a true oligopolist sympathizer. Its true that all these companies are running a business, *gasp* shocking, I know! However to say that an outright refusal to even try to be competitive is proper business conduct is an unqualified statement to make.

Now, to address your example. No, its not a necessity to be able to download movies on your cellphone, we all get that. But thats not the point.

The point? Canada’s wireless landscape is still very much in a stagnant state. The attitudes of top management from companies like Rogers are not helping the situation, and haven’t been helping the situation for as long as I can remember. This dramatically slows our rate of adoption of newer wireless technologies because we hate our providers so much. The slower we adopt newer tech, the slower the tech trickles down to the common end user, the more backward our nation becomes in the wireless market. But you already knew all of that, right?

jarr

@ James

backwards nation?

We have THREE carriers that all sell the iPhone. We have THREE carriers that have HSPA+ (3.5G) networks and reach 93% of the population.

Nowhere else in the world is this true. In Europe, Asian – broadband wireless only hits Urban centres.

Take a look at monthly charges in Europe – actually go look them up – you will see how competitive prices are in Canada. Do some research before you whine about how “backwards” Canada is.

James Lui

@jarr

Okay, in Europe, does the UK qualify? No? Too bad. 3 UK, the network with I would say a fairly large 3G network coverage over the entire nation.

Over there they combine the monthly fee with the offset of the phone for the entire contract length (24 months, no THREE years, gee, that sounds competitive already!)

I’ll choose an example. The HTC Hero, a moderately well featured phone.

Price? 21 GBP/month. According to the Google converter thats approximately $32/month Canadian before taxes and such.

The closest thing? Oh wait, we don’t have unlimited data here except for WIND and Mobilicity. If looking right at the incumbents, the most comparable price is infinite. Infinite. Plus the cost of the handset, $30 CAD on a 3-year term, $500 off contract. You call that competitive? Please. Try me again, even cherry pick the worst provider in Europe and compare to Rogers, Bell, or Telus. Tell me again what they do amounts to proper business conduct.

3.5G is kinda irrelevant when the cost of access is so prohibitive. Which was the second part of my post, which you obviously didn’t bother to read. The rollout of service is much different than the adoption of that service. How many people do you know with Robellus that have a data plan over 500MB with an appropriate smartphone and that isn’t paying more than $50 before tax on their plan? Oh right, thats no one.

I also don’t think the adoption of the iPhone by multiple carriers can be used as an indicator of healthy competition, merely just a sign of more collusion on expensive and binding plan contracts.

IF YOU DON’T CARE TO READ THE ABOVE JARR AT LEAST READ THIS: We may be on par with the rest of the developed world from a tech standpoint. However, the overwhelmingly dominant attitude in the market presented by the incumbents is plenty backwards. Which was my main point, thanks for playing.

Whatcha Say

Well said James, way it stick it to him!

MuRaNo

@James Lui

this doesn’t include wireless to any other provider, so if I call people on the biggest carrier in Germany T-mobile I am billed !!! youhou ! Land lines are so passes in Europe no one uses them anymore ! Oh if you want to add those wireless to wireless your price goes up to 104,95 euros $162.67 lol !!!!

For the record, Rogers is the living proof that you don’t need to have national coverage to be successful in this business. They have between zero and mediocre coverage in the eastern provinces, up north and out west in this country, yet, they’ve managed to find millions of suckers mostly in Central Canada where they are about to have lots of competition.

Most Canadians are not very smart. They think it’s a fantastic deal to pay $50 less on a 36 month plan, not realizing that the deal cost $2,100 instead of $2,150 and the real cost is likely to be much higher anyway because the contract will outlive their phone in most cases.

BUT Canadians are willing to go across town to save a penny on a litre of gas. Again, this is not very smart because the savings are offset by the extra distance to get there. But they will do it.

toysandme

“Smartphone plans start these days around $10 a month for basic data”

Please anyone, tell us where you can get this kind of deal on a SMARTPHONE.

Chrissy

Koodo has a $10 smartphone add-on

toysandme

“Koodo has a $10 smartphone add-on”

for 50 MB on a CDMA SnoozeBerry:-(

I’d call this “less than basic” data plan.

Mike

I HATE Rogers!!! I am with Fido, they seem okay I know they are related, but they have different call centres, and different CEOs thank god! “If they wanted to lose customers!” PFFT I hope people leave them in droves for the competition! That’s a pretty bold and cocky thing to say! GO TO HELL ROGERS!

jarr

James Lui:

I am glad you brought up the fact that Vodafone, 3UK as being unlimited data providers and how Rogers, Bell etc don’t offer unlimited etc.

Note that last week, O2 in England announced it is moving away from Unlimited and will move towards “tiered” pricing similar to Canada.

Vodafone and 3UK will also follow.

Do a search as we can’t post links here

O2 heralded a major change to the UK mobile phone market on Thursday by announcing that its bandwidth-hungry smartphone customers will pay more if they are heavy surfers of the web.

The UK’s second-largest mobile operator, which is owned by Spain’s Telefónica, is scrapping so-called “all-you-can-eat” data plans under which smartphone customers could do as much web browsing as they want for a fixed monthly fee. Instead, customers will pay according to how much data they consume each month.

Orange and T-Mobile, which have combined to form the largest British operator, are preparing to follow O2’s move, together with Hutchison Whampoa’s 3UK. Vodafone has taken some steps to end unlimited data plans, although analysts said its arrangements were not as tough as O2’s.

5Gs

HAAA all you data users are being used by rogers. You pay xxx amount at rogers, when you can pay $85 at wind.

GO WIND GO

Orchid

$10 data minimum fee for smart phone is for the email add on. You still need a voice plan. There are plenty of educated tech people who use Koodoo or Fido or other discount brands because they don’t need unlimited things such as unlimited texting, unlimited mobile browsing etc. We spend our money and TIME on other things: kids, mortgages, vacations, sports, etc.

Just returned from the UK and found their plans are not cheap either. Currently you get unlimited all kinds of things for quite a lot of money. BUT>>>nobody except Canada has a 3 year plan. ANYTHNG can change in 3 years so why lock in for that length of time? I don’t. I bought a new blackberry from a friend (at much less than he paid for it) who changed his mind and wanted the latest BB. I joined Fido on a month to month plan (not pay as you go). I am free to change to whichever carrier I want. The only reason I didn’t go with Wind is because they don’t have GSM phones and I travel abroad where I need one. I pay less on FIDO and get plenty for my money including early E/W starting at 5:00 PM and call display.

Iki

@5Gs

Wind users pay $85 for data? Lol, I only pay $30 on Rogers

Scott S

@lki

WIND is $35 unlimited data, he was quoting with unlimited talking, texting, vm, cid, and tax (which would still be under $85 in alberta).

Maybe the new unlocked iPhone will make Rogers smarten up a bit.

Keith

The only reason I didn’t go with Wind is because they don’t have GSM phones and I travel abroad where I need one.

Posted by Orchid |

They do have GSM phones. It’s just on the AWS band. But that’s usually only the North American portion. The rest of the international bands are there and your phone should work abroad.

Moreover, Wind unlocks your phone after 3 months, so you don’t even have to roam when you are abroad.

Roger Ted

The mark up on one Rogers customer; pays the price of two/three/four wind customers. Volume isn’t everything – three year contracts cost money to get out of, as well the market. The majority of Canadian citizens have cell phones, the problem is getting them into the hands of people – but keeping them – and the majority of Canada is NOT in a windzone as of yet which will hinder their success.

Nd4SpdSe

I had Rogers on two seperate occations, once as a cable Internet customer, and another as a wireless Internet customer, they provided poor service and did nothing to want to keep me as a customer, and I’ll never be one again as long as I can help it…